China’s state-backed iron ore buyer has instructed domestic steel mills to halt deliveries of certain iron ore products from Fortescue, making the Western Australian mining giant the latest target in Beijing’s campaign to gain leverage over global commodity pricing.
The China Mineral Resources Group (CMRG) has issued verbal directives to several mills stating they must not take delivery of portside cargoes of Fortescue’s Super Special Fines and Fortune Fines from July 15, five sources with knowledge of the matter told Reuters.
Both targeted products are lower-grade iron ore variants.
The sudden restriction marks a significant friction point for Fortescue, which relies heavily on the Chinese market and is currently locked in deadlocked supply contract negotiations with the state buyer.
The logistical ban could cause major supply headaches at Chinese ports, where stockpiles of Fortescue’s Super Special Fines stood at 7.22 million tonnes as of June 30. That figure represents roughly 5 per cent of China’s total portside iron ore inventory.
The manoeuvre mimics a months-long standoff between CMRG and BHP that wrapped up in April. During that dispute, Beijing gradually restricted multiple BHP products before lifting the bans once a supply contract was finalised.
CMRG was established by Beijing in 2022 specifically to centralise the nation’s massive iron ore procurement and wrest price control away from multinational mining companies.
The group has already shown a willingness to intervene aggressively; just last month, it ordered domestic steelmakers to boycott discussions regarding Fortescue’s upcoming Fortune Fines product line ahead of its scheduled July launch.
Fortescue declined to comment on the matter, while CMRG did not immediately respond to Reuters’ requests for comment.
